County primed for new growth in home building

Experts in the housing industry are expecting a breakout year of growth in Montgomery County as several signs point to a busy spring construction season.

The number of single-home building permits issued by the Montgomery County Permitting Department in the first three months is the highest it has been in four years. There were 792 building permits filed including 183 in January, 241 in February and 368 in March.

Since 2008, when there 921 single-home building permits filed in the first three months, permits have failed to top 700 in the county, with 531 in 2009, 697 in 2010 and 606 last year, according to the U.S. Census Bureau.

Phil Jones, administrator over the Montgomery County Permitting Department, said his office has seen elevated activity in both residential and commercial permits. He said there is a typical increase in permits in March but he can tell the difference from previous years. March and September tend to have the most building permits, records show.

"In the spring, people are normally going to build a lot more, and that's usually because it rains a lot in the winter time and it's hard to build," Jones said. "We have a few more permits over last year, but we're not close to where we used to be."

In January 2004, there were close to 500 permits issued by the county, according to the U.S. Census Bureau.

Will Holder, vice president of the Greater Houston Builder Association, expects the trend of increased starts will continue through this year and at least the next three years. He said there is a strong demand for housing in The Woodlands and the rest of Montgomery County.

"The main cause to there being more starts is the population growth and job growth," Holder said.

However, the number of starts in the county has not kept pace with the growth in recent months, he said. "Typically, it's one house for every 2 1/2 jobs. Right now we have more jobs than starts, but that's not going to be sustainable," Holder said. "We can't have that many jobs and stay at the current level of starts."

The planned Exxon Mobil Corp. consolidation of thousands of Houston-area employees into an elaborate new campus being developed just south of The Woodlands is expected to add to the real estate boom.

About 8,000 employees will relocate to the new facility to be built on a 385-acre site near the intersection of Interstate 45 and the Hardy Toll Road.

The main benefactors for the move will be some of the developers building homes in around The Woodlands as well as those looking to sale homes.

Holder expects the demand will be such that homes in Montgomery County will likely be on the market 10 percent less longer than other submarkets around the Houston area. Holder said The Woodlands was already one of the strongest housing submarkets in Houston and the Exxon move will only boost the market.

Woodforest Development, a master-planned community north of The Woodlands, has acquired 35 building permits this year and is on pace for 200 starts for the entire year, said Virgil Yoakum, Woodforest Development general manager. The development, which began in 2009, has over 300 starts.

Yoakum hopes the development, which is 19 miles away from the Exxon campus, will continue to draw new homeowners.

He said Woodforest is in the first phase of the development which will have 5,500 homes once built out in about eight to nine years.

"For years, this has been one of the leading areas in the nation for employment and new growth, and The Woodlands has been the No. 1 selling community for a number of those years," Yoakum said. "The growth we are currently seeing is staggering."

Another indication home construction may take off this spring is building material sales.

84 Lumber in Conroe has seen a 20 percent increase in sales the first two months of the year compared to the same time in 2011, said store manager Mark Olivani.

"Another way you're able to tell it's may be becoming a builder's market is we're getting a lot more quotes from custom home builders and owner-built homes," Olivani said.